Bulgaria torpedoes the West's efforts to diversify its energy sources
“We are back in the game,” proclaimed Bulgarian President Georgi Parvanov when he ofﬁcially approved the South Stream gas deal with Russia. Many analysts believe South Stream will derail Nabucco, the major Western project aimed at bringing Caspian oil to Europe.
“We've just hit a grand slam,” Parvanov intoned as his Russian counterpart Vladimir Putin told the Bulgarians that their efforts to join the EU and NATO had been a “pause” in their relations with Russia.
In a way, the Bulgarians, particularly those in Soﬁa, do have a reason to be happy. They may not be getting any Russian gas soon, but following the failed attempts to clean the city of snow, which were varyingly termed comic and/or dramatic, the city centre suddenly became spic-and-span ahead of Putin's visit. Welcome to Bulgaria Anno 2008, the Year of Russia which the government had announced, and been preparing for, for months.
The ofﬁcial reason for Putin's trip, just before the end of his second and last term in ofﬁce, was the 130th anniversary of the 1877-1878 Russo-Turkish War. Russophiles and members of the ruling BSP, or Bulgarian Socialist Party, claim it freed Bulgarians from the Ottoman Empire. Sceptics and members of the opposition argue that it also placed Bulgaria in the orbit of the Russian Empire. Signiﬁcantly, it remains there to this day.
After 130 years, Russia's relationship with Bulgaria remains at best controversial politically, economically and emotionally – and usually deﬁes logical explanation. It has been geopolitical in 1878, brutal in 1944, repressive for 45 years thereafter, and now is termed “oligarchic”.
Putin made his second visit to Bulgaria for a single – and crucial – purpose: energy.
After some ostensible haggling, appropriately played out by the ﬂaks as defending Bulgaria's national interest, Bulgaria agreed to give Russia 50 percent ownership of the projected South Stream pipeline through Bulgarian territory. The government said this ensured Bulgaria wouldn't be an “onlooker” in the business, which it would have been had it accepted Russia's original offer of 49 percent. The one-percent stake was granted after “the 11th-hour interference” of Putin personally, the media said.
However, political analysts and power engineering professionals are disbelieving. “Most of the agreements were drafted a year-and-a-half ago, so it would have been a real surprise if they hadn't been ratiﬁed,” says Marin Lesenski, an expert with the Open Society Institute. In one sitting, Presidents Parvanov and Putin signed contracts for the planning, equipping and construction of the Belene Nuclear Power Plant; an agreement between the countries participating in the Burgas-Alexandroupolis oil pipeline; a memorandum outlining Bulgarian and Russian cooperation during the building of the South Stream transit gas pipeline; and three other cultural, educational and transport agreements.
“In fact, the only new project is South Stream,” says Lesenski.
The projected pipeline will connect Russia and Italy, running through Bulgaria but crucially sidestepping Turkey. Russia also invited Serbia and Greece to participate in the project.
The ruling Bulgarian politicians don't seem particularly concerned about putting all the country's energy eggs in Russia's basket.
The situation is at best unusual. Even Ukraine, which is not an EU or NATO member and which is much closer to Russia, tried (unsuccessfully) to reduce its dependence on Russian energy in 2006. Bulgaria is an EU and NATO member, yet – for reasons that haven't been openly laid out to the general public – it keeps on joining Russian projects.
In 2006 the EU recommended that Bulgaria diversify its energy sources. A report entitled “The EU's Energy Security Policy in the Black Sea Region” envisaged the creation of new infrastructure and transport corridors that would help diversify suppliers and delivery routes for fuel arriving via the Caspian and the Black Sea. The document discusses important EU projects such as the Nabucco gas pipeline, which would skirt Russia, transporting Caspian oil via Turkey and Bulgaria. There's also the Constanta-Trieste oil pipeline in the works, as well as the AMBO petrol pipeline from Burgas to Vlorë in Albania.
In their paper “A Power Audit of EU-Russia Relations” for the European Council of Foreign Affairs, Mark Leonard and Nicu Popescu write that Russia is setting itself up as an ideological alternative to the EU, with a different approach to sovereignty, power and the world order. If Russian leaders get their way, the EU will need Russia more than Russia needs the EU, particularly where energy is concerned. While in the 1990s everybody was talking about Russian dependence on Western credit, now the topic of the day is European dependence on Russian gas.
I don't think we should see this as a continuation of Russian imperial politics in the Balkans using new means, namely energy,” notes Marin Lesenski. “Russia seems to be above all pragmatic.”
But is Bulgaria being pragmatic?
The Burgas-Alexandroupolis oil pipeline, which will cut through Bulgaria's protected Strandzha National Park, has not been an EU priority. At the same time, the Bulgarian public was convinced that the EU's preferred Nabucco pipeline could not guarantee the country enough gas and that the only supplier Bulgaria can really count on is Gazprom. For this reason, former Economy and Energy Minister Rumen Ovcharov, who stepped down in 2007 over corruption charges, offered this argument at the end of 2006, creating a novel economic doctrine in the process: Bulgaria's energy independence depends on getting into bed with the monopolistic Gazprom. “We succeeded in negotiating for the use of transit gas pipelines without giving up ownership, something countries like Slovakia, Germany and the UK were unable to achieve. This agreement gives Bulgaria greater independence,” he told the Dnevnik daily.
Nuclear energy is no exception. Not only will the Russian giant AtomExportStroy build Bulgaria's new Belene Nuclear Power Plant, but the National Electricity Company already sold the Russians its unused but fully functional steam generators – for $38 million instead of the $160 million they are actually worth. Bulgaria picked up the tab to transport them to the Kalinin Nuclear Power Plant, along with all the customs duties and taxes.
That “game,” which President Parvanov happily referred to in his ofﬁcial statement with Putin, is extremely dangerous for both Bulgaria and the West. “Russian control of energy is exceptionally unhealthy, because Russia can also use it to apply political pressure. We should never forget that participation in Russian projects requires huge investments from Bulgaria's side, which is a great burden on the country,” concludes OSF expert Marin Lesenski.
It has become a commonplace that Bulgaria is Russia's Trojan horse in the EU. But is the West already starting to see the hidden soldiers crawl out of its belly, ready to spread misery and disaster? Maybe – but maybe not. Leonard and Popescu point to Greece and Cyprus as the real Russian stooges in the EU, while counting Bulgaria among the Friendly Pragmatics, in the same group with Austria, Portugal, Slovakia and Slovenia. These countries maintain a close relationship with Russia and tend to put their business interests above political goals. The Frosty Pragmatics like Romania, Ireland and the UK also focus on business interests, but are less afraid to speak out against Russia's general policies and less-than-perfect human rights record.
According to Leonard and Popescu's report, Russia is Bulgaria's second-largest trading partner, LUKoil is one of its largest tax payers, and in 2006 the country received more than 200,000 Russian tourists and property buyers. These new guests play an increasingly important role in one of Bulgaria's most dynamic sectors: the real estate market.
Could this ﬂood of Russian capital be behind Bulgaria's Euro-scepticism? An Alpha Research study at the end of 2007 showed that nearly 80 percent of the Bulgarians approved of the country's accession to the EU. But when asked what they thought about the closing of the Kozloduy Nuclear Power Plant's Reactors Nos. 3 and 4, a similar percentage angrily declared that this had been a major blow to national interests caused directly by pressure from the West – at least according to the Alpha Research survey. Since January 2008, the Bulgarians have a new reason to expound on their favourite theme: “The West wants to subjugate us, humiliate us and deprive us of our cutting-edge technology.” Under the headline “The EU Prepares a New Energy Blow,” the Sega daily reported that the EC was drafting a letter demanding the close of the Maritsa-Iztok Thermal Power Plant. It generates more energy than the Kozloduy Nuclear Power Plant, but spews so much sulphur dioxide that it is listed in the Guinness Book of World Records.
As the poorest Europeans, Bulgarians are still broke enough to prefer ﬁlthy air that brings jobs to blue skies carrying unemployment. Consequently, Putin easily appears as a knight in shining armour, whose generosity can be cleverly manipulated in the traditional Balkan style.
The Bulgarians – and many of their politicians – have long considered Russia their guardian angel, even before the 1878 “Liberation”. Since the 18th Century, when Russia took on the role of “protector” of the Ottoman Empire's Christian subjects in order to justify its desire to control the Balkans and the Bosphorus, Bulgarians have hoped for the Russians to come and free them. A series of wars, however, ended with a different result: waves of Bulgarian refugees ﬂeeing to the Banat and Bessarabia. Afterwards, Russia took full advantage of the Great Powers' revisions of the Treaty of San Stefano to convince the Bulgarians that it was their only true defender. In the 130 years thereafter, it has repeatedly cashed in on Bulgarian gratitude, manipulating Bulgaria's political life.
Stalin's invasion of Bulgaria in 1944, which made possible the Communist coup, placed Bulgaria ﬁrmly in the sphere of Soviet inﬂuence – signiﬁcantly, with Churchill's explicit agreement. Until 1989, dictator Georgi Dimitrov's statement that the “friendship between the USSR and Bulgaria is what the sun and water is to every living creature” was untouchable because Bulgaria had become the USSR's most loyal satellite. But that didn't stop Bulgarians from trying to put one over on their “Soviet comrades”. For example, at the height of the 1970s oil crisis, dictator Todor Zhivkov re-sold cheap Soviet fuel on the open market at a huge proﬁ t, which he used to ﬁnance his regime.
Modern Bulgarian politicians appear to be continuing their predecessors' treacherous balancing act between the West and Russia.
One possible explanation is provided by Janusz Bugajski of the Center for Strategic and International Studies in Washington: “The Kremlin exploits the personal interests and links of some Bulgarian politicians to turn Bulgaria into a Moscow appendage. It manipulates the Kosovo Question in order to detract Serbia from the West and to cleave itself into Southeastern Europe... Energy remains the single most efﬁcient instrument to assert Russia's imperial ambitions. The Russians insist on the need for a ‘new economic order' in which the West wouldn't dominate.” Bulgaria, it seems, is just a pawn in this game.
To put it another way, with a friend like Russia, who needs enemies?
While Bulgaria kowtows to Russia in a manner unseen since the days of Communism, relations between the UK and The Kremlin have become increasingly acrimonious. The 2006 murder of former KGB agent Alexander Litvinenko in London set off a chain of events whose latest developments involve the British Council offices in St Petersburg and Yekaterinburg being ordered to shut down. This is the latest move in a tit-for-tat charade in the wake of Russia's refusal to extradite businessman Andrei Lugovoi, a former KGB agent and now deputy chairman of the Duma, to stand trial in the UK on murder charges.
While Foreign Secretary David Miliband declared the actions “blatant intimidation” and “not worthy of a great country,” the Russian government accused the UK of misrepresenting the facts. Among ordinary Russians, opinions are divided. Some think the British Council's educational and cultural influence is a boon, while others are convinced that these activities are merely a smokescreen for UK secret agents.